Auto Sales Surge in August, Led by Chrysler, Ford, Nissan

Craig Warga/Bloomberg via Getty Images DETROIT -- August auto sales were unexpectedly strong, thanks in part to heavy discounting by the manufacturers, with the industry selling at an annualized pace not seen since early 2006. General Motors (GM) narrowly missed expectations, but held on to the top spot, while Toyota Motor (TM) edged Ford Motor (F) for the second straight month. The lowest gasoline prices in four years helped GM and Chrysler Group, a unit of Fiat, achieve double-digit gains in sales of full-size pickups, which provide the bulk of profit. But sales of Ford's industry-leading F-Series pickups fell as the automaker began the changeover to an all-new aluminum-bodied version. With most of the top automakers reporting August sales by midday Wednesday, Morgan Stanley (MS) analyst Adam Jonas said the industry's seasonally adjusted annualized sales rate last month was a higher-than-expected 17.3 million vehicles, well above the 16.6 million forecast from analysts polled by Thomson Reuters. It was the highest rate since 17.6 million in January 2006, according to research-firm Autodata. "The industry had its best August in over a decade, with sales topping 1.5 million vehicles," observed Bill Fay, Toyota Division group vice president. Auto sales are an early indicator of consumer demand as the industry accounts for one-fifth of all U.S. retail spending. GM sales fell 1.2 percent to 272,423 vehicles; analysts had expected 272,734. Toyota was up 6.3 percent to 246,100, beating the forecast of 225,973. Ford was up 0.4 percent to 222,174, against the expectation of 216,991. Chrysler showed a 20 percent gain, to 198,379, compared with a forecast of 185,072, while Nissan Motor was up 11.5 percent to 134,388, versus an expectation of 123,855. Korean automaker Hyundai Motor said August sales were up 5.9 percent to 70,003. Volkswagen was down 12.8 percent to 35,181. Incentive spending by the industry last month climbed from a year ago, to an average $2,772 per vehicle, but declined slightly from July, according to research-firm TrueCar.com. Virtually all major automakers except Nissan boosted discounts from a year ago. Research-firm Edmunds.com said August sales were helped by a higher percentage of zero-interest dealer-financed loans. Transaction prices in August averaged $32,495, driven by strong sales of pickups and full-size SUVs, according to research-firm Kelley Blue Book. -. When you get into that back office and start signing all the paperwork, the topic of extended warranties will come up pretty quickly. Ellie Kay, an author of 15 finance-related books, notes that such warranties are negotiable. "Before you sign on the dotted line, check out other sources of extended warranty pricing," she says, such as those provided by your bank or insurance company. "Then either use this lower price in the financial and insurance office for negotiation to get them to match the price, or buy it from the other source." A scenario from Kay during her last car purchase: "The dealer quoted me $4,200 for a three-year extended warranty for my 280SLK Roadster Mercedes that included a $250 deductible. USAA -- my insurance company -- gave me a three-year warranty for $3,200 with zero deductible. I've used the new warranty once already. The bill was $1,100 and I paid nothing because of the zero deductible." Bottom line: The default extended warranty is almost always the worst deal. 1. You'll get the dealer's extended warranty You may have a monthly payment figure in your head when shopping for a new car, but your interests are better served when you focus on the out-the-door price instead. "A sales rep can often trick you by offering a lower monthly payment, but [one that] will stretch out the terms of the loan," says David Bakke, a car buying expert at MoneyCrashers.com. You can reduce the overall cost of the car via negotiation and by skipping accessories and add-ons. "Things like navigation systems, rims, floor mats or car audio/entertainment systems can be purchased from a third party vendor, usually for less."